EUR/USD, GBP/USD, EUR/JPY Daily Analysis August 7, 2014
Well unfortunately I spoke too soon yesterday thinking all was well as I am writing my daily commentary. Just about the time I was finishing up and loading the last pic to it my computer started acting weird again and crashed within minutes of me finishing my commentary so here I am doing it from an iPad again.
The EUR/USD did make a second push down yesterday but the rejection at the lows from the daily level at 1.3332 does concern me. I will have a small bias for the short today but will still be open for the long if they give me a good reason to take it. Normally I would only be looking to short for the third push but if they do have conviction in higher prices and show that, I will be willing to take the long today.
The best level for the short is the current Asian high of 1.3391 since the probability of this hourly close being a fake out is higher than it being true conviction. It will depend on how they treat it during London. If they do hold the Euro strength then I will consider the long at the Asian lows or preferably the 1.3374 level just below.
The GBP/USD made a reversal on the first push up and now has an intraday push down leaving it unclear on direction so today I will be open for the short at the Asian highs as long as they push it down and run the breakout traders to the Asian lows first. Otherwise the safer short is from 1.6887. The safest long will be from 1.6827. The daily low at 1.6843 is valid but carries much higher risk for a long since there is an intraday push down.
The EUR/JPY made its third push down and has a nice bottoming formation so I will be bias for the reversal today. The best level for the long since they have shown some slight conviction during the Asian session is down at 136.48 but they may just stop it just above at the Asian lows if they do manage a test and dont run it off. Otherwise I will be willing to take the long from higher but will need to see them push it up and come back to test the Asian highs or 136.71 during the London session. If I do miss the long I will be open for the short where the ADR sits just below yesterdays highs. I wont be holding for a long run but getting a reversal from there or yesterdays highs has good potential for a 2-1 trade. Especially if they run a fake out and start another three pushes down.
Forex News Today
The calendar is busy with the interest rate decisions from the ECB and BOE later in the day so we arent likely going to see big moves until that data is released today. Of course if there is a set up I will take it but if I dont have my stop to break ven I wont risk takeing a full hit holding through it. They will be looking for Carney to bolster any raising of rates in the future for the UK and once Super Mario gets on stage they will want to know when the ECB will go full retard and join in QE. With the bad German factory orders data yesterday the chance has risen but I think we will need to see more of that continue since there has also been other good German data also.
The US does have Thursday Unemployment data but as long as it dont miss massively they will likely ignore it due to Carney and Dragi.
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